When getting started it is important to know your online business competition. Competition in online business seems like a scary situation. In fact it stops a lot of people from even getting started with their business! But in reality competition is a GOOD thing. And, dealt with correctly, competitors can be converted into collaborators.

Competition in online business: a bad thing?

Building a successful online business means knowing your market and who else is providing value to the market. Once you know who else is operating in the market you can look for gaps where you can supplement their work.

Potentially, and this will be the focus later in the article, you can even work with your competitors and become a collaborator.

As part of the Business section of the BATON framework we look at who is already operating in our market. We cover this in depth in our free online business course.

A lot of amateur or first time business owners see competition and immediately throw their hands up and say “what’s the point?”

They tend to see competition as a bad thing.

It is not.

If anything seeing competition in the market is one of the best early signals you can find.

The reason for this is that if competition is present and seemingly sustainable there is a market.

If we find zero competition for our particular business idea chances are that there is no market.

Competition risk vs. market risk

Very rarely will a business idea be truly unique. More likely somebody has already tried and failed with your idea.

Therefore, when we see absolutely no evidence of competition more likely the reason for this is that there simply is not a market for the idea. Sorry!

Market risk is much more devastating than competitive risk.

We can work with/around competitive risk. Market risk? You’re stuffed.

Therefore, when starting any new online business I always want to see existing competition. No competition raises red flags!

How do we find online competitors?

We can use a number of different tools to work out whose competitors are in our particular market.

This is much simpler if you have at least one competitive website to start with. Think of this website as the seed of your search.

Take this one competitor website and head to SimilarWeb. SimilarWeb will spit out a number of other similar websites (name makes sense eh?), most of which will also be competitors or at least operating in your space.

You can also use Facebook Audience Insights, again plugging in your starting website, to find similar competitive brands and companies.

These two basic methodologies will give you your Google and your Facebook competition. This gives you a pretty good starting point for running competitive research.

To really work out who your true competitors are you need to first know who your customer is. Once you have developed a customer avatar and/or started to make your first sales you’ll be in a much better position to do so.

What if we worked with our competitors?

When you find your competitors the first instinct might be to try to work out how to beat them and take their market share.

This is certainly a valid discussion. A lot of competitive strategy focuses on how to do better than your competition, take their market share and generate more profit than them.

However, in this article I want to look at how you can potentially turn competitors into collaborators.

This is particularly important if you are just starting out as your competitors will have several years of doing business more than you. They are “incumbents”.

This makes going against them head-to-head, potentially without large amounts of capital, very difficult.

Instead we can creatively think about how to work with them in order to more quickly reach their level and potentially even surpassed them (ie. leapfrog them).

Preparing to work with competitors

Relative strengths and weaknesses

Start with working out what your relative strengths and weaknesses are compared to your competitors.

For example, one of your large competitors may have a very active e-commerce shopfront with lots of customers and high amounts of revenue but they are very bad at social media and attracting new demographics. They don’t get “the facebook” and never will.

You on the other hand may not have any revenues so far but are much better at social media and generating interest in your particular niche.

You’ll need to run this kind of analysis with all of your competitors in the market to work out where you sit relative to them. It will also help you realise that there is a value that you (and you alone) can add to the market that they cannot.

Markets can grow

Second, realise that markets are not static. If your initial impulse was to question how to take their market share then let me ask you this: what about if you grew the size of the market instead?

Doing so would mean that there is more to go around and less need to fight tooth and nail for customers.

Instead of worrying about your slice of the pie bake a bigger pie!

You can do this by collaboratively making more value in the market.

In the example above your competitor had solid e-commerce revenue channels but suuuucked at social media marketing.

What have you worked with them and provided social media marketing front-end delivering traffic into their existing e-commerce structures? Then you’ll grow your company, the market gets larger and you both do better overall.

You could go a step further and even collaborate on a new business together. Perhaps a new venture taking your relative strengths and building something even stronger?

Doing all of this so will very much require a growth mindset. It will need you to realise the market is not static and you don’t need to fight with every last crumb. Instead, by working together, you can build something larger, give your early business a quick leg up and help them grow their existing business.

How do we turn competition into collaboration?

The big challenge you will meet is that you are the new online business entering their space. Very likely existing larger competitors will be wary of you as a new entrant. It’s up to you to overcome this natural suspicion and to show that your inclusion in the market is it positive rather than a negative situation.

This requires you to deliver value to them and their business upfront. After this initial peace offering you’ll be in a position to build value together.

Guest blogging

One nice easy entrance strategy is to propose writing a guest blog for their website. Elsewhere, I explained in great detail how to do guest blogging. This is a good starting tactic to open communications and build a relationship.

Resource list

A nice alternative is to put together some sort of resource list that includes your competitors.

For example you can list out all the top resources and companies in your particular niche, turn this list into an attractive infographic and circulate this infographic online via social media.

When you publish and promote your infographic you simply tag in your competitors so that they know that you are out there saying nice things about them, their products and services. Everybody loves to be complimented and have their egos stroked! This is a good visible way to do so publicly.

And the great thing is that they’ll tend to share and promote your work to their customers…all because it makes them look good. Win-win!.

Affiliate

Third, you can more directly promote their products. A lot of existing companies will have an affiliate scheme in place which allows you to refer customers to them in exchange for a percentage of the sale.

If you become one of their more notable affiliates (and therefore are contributing to their bottom line) then they are more likely to be receptive to working alongside you. You doing well means they do well.

Competitors to collaborators

Once you have made initial contact and opened their eyes to the concept of collaborating it’s really up to you how you produce value together.

At this point refer back to your relative strengths and weaknesses and focus on what value you can provide to the relationship.

Again by focusing on value-add you’ll always be operating in the right direction. How can you add value to their business? How can you add value to their customers?

The answer to these questions will be your route towards collaborating successfully.

Start with a small collaboration, prove that you can deliver and add value, and then move to larger more involved and intricate projects together.

Online business competition: the new perspective

Hopefully over the course of this blog article you’ve come to see online business competition in a different light.

Fist up, you’l have grasped the importance of competition existing in the market. If there is no competition there is likely no market. Therefore competition is a good thing!

Second, hopefully you can now view competitors as potential collaborators. By working together you can grow the pie rather than scrabbling for each slice.

Third, we looked at a few low friction ways to begin collaborating with your competitors, show them the value you can add to their customers and -in time- become longer term partners.